This week's market reminded me of a drunk walking down the sidewalk, lurching back and forth, but managing to stay on the sidewalk. The bulls and bears each thought they had control at one point this week, but neither camp could manage to hold onto it. Today SPX closed up $3 at $1878 and RUT gained $10 to close at $1107. Volatility contracted a bit with the VIX losing a half point to close at 12.9%. Trading volume declined with 1.9 billion shares of the S&P 500 trading. Trading declined 11% on the NYSE and dropped 18% on NASDAQ.

The 50 dma continues to serve as support for SPX; it bounced off the 50 dma again today. But RUT is trading much weaker; it broke the 200 dma decisively on Tuesday and appears to be using the low from early February as its support level. RUT bounced off $1092 to begin its upward climb this afternoon, closing at its highs for the day. SPX has now spent three weeks trading in the narrow range of $1865 to $1885, while RUT has trended lower. Comparing the recent behavior of these indexes shows us how traders have been rotating out of the riskier small cap stocks into the blue chips. Some analysts interpret this as the leading edge of a major correction, but so far that has failed to materialize. SPX has held very steady while the NASDAQ composite and RUT have trended downward.

My May iron condor on RUT is in pretty good shape with a net gain of 5%; theta for this position is now up to $274 per day, so it will rapidly appreciate, assuming the big crash doesn't make a showing. My Jun position is in even better shape at +8%; we were able to position our June put spreads down at 1040/1050 and that has relieved much of the pressure this week as RUT broke its 200 dma.

Enjoy your weekend.